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Hello Readers,
Since the last Newsletter, we closed four positions, three for gains and one for a loss.
ROSETTA GENOMICS (2/20/10). Closed position 3/30/10 at $2.47 for a 54% GAIN.
ZIOPHARM ONCOLOGY (5/5/08). Closed position 3/26/10 at $4.80 for a 60% GAIN,
SUPERGEN (2/5/08). Closed position 3/25/10 at $3.47 for a 54% GAIN.
HYDROGENICS (9/20/06). Closed position 3/25/10 at $6.18 for a 85% LOSS.
Ziopharm began finding new life about a month ago and had a nice steady climb since then, and for no real apparent reason, so, it was time to close the position. As for SuperGen, it got a nice pop when the FDA approved a new dosing in a bone marrow treatment that the company was in partnership with Eisai, Inc. Rosetta Genomics received a nice lift after the company was accredited by the College of American Pathologists. And, we finally closed Hydrogenics for an ugly loss.
We are going to stick our necks out and just go ahead and call this the “Zombie Market”, since nothing seems to be affecting it. Then again, this is the first time in U.S. history, including the Great Depression, that the government has been this intrusive in the markets. When does the Fed begin raising interest rates and pop the equity bubble it has created? When do all of the government stimulus and bailout plans end? When does the march to socialism end? As Margaret Thatcher once said, “The problem with socialism is that, at some point, you run out of other people’s money.”
Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them. We are not giving updates about companies that are on the “Endangered List” unless we feel the news is highly significant.
Achillion Pharmaceuticals (ACHN)(3/5/10). To present at the International Liver Congress on April 15. Awarded NIH grant to study unique antibacterial compound series.
Cerus (CERS)(3/20/10). Signs agreement with Swiss Red Cross for the deployment of the INTERCEPT Blood System for Platelets.
Clarient (CLRT)(3/5/10). New data indicate effectiveness of Ovotax test for ovarian cancer.
Zagg, Inc (ZAGG)(2/20/10). Introduces two new device protection films.
Microtune (TUNE)(2/5/10). Announces settlement with Ramius LLC.
Cytokinetics (CYTK)(2/5/10). Announces opening of Phase IIa “Evidence of Effect” clinical trial of CK-2017357 for patients with ALS. Chairman resigns.
Chelsea Therapeutics (CHTP)(1/20/10). Brokerage firm Needham gives the stock a “buy”. Says drug boosts blood pressure in monitoring study.
NIVS IntelliMedia (NIV)(1/20/10). Quarterly and year-end numbers look pretty good, as does balance sheet.
CytRx (CYTR)(1/5/10). To receive $3.8 million from selling RXi Pharma stock.
Corcept Therapeutics (CORT)(12/20/09). Latest balance sheet still looks good.
OXiGENE(OXGN)(11/20/09). Auditors raise ongoing concern doubts, but Roth Capital gives the stock a “buy” rating.
Uranerz (URZ)(11/20/09). Initiates permit applications for third Powder River Basin Unit.
Qualstar (QBAK)(10/20/09). Signs agreement with Powergate to be a distributor for N2Power’s entire product line of XL-Series AC-DC and DC-DC power supplies throughout North America.
Solta Medical (SLTM)(10/5/09). Announces sponsorship of Fresh Express Classic at the TPC Stonebrae.
BioSante Pharmaceuticals (BPAX)(9/20/09). Recent cash position still looks good as company also reports receipt of $2.16 million in Elestrin royalty buydown. Reports additional positive leukemia vaccine results and second FDA Orphan Drug Designation.
Anadys Pharmaceuticals (ANDS)(8/20/09). Announces two ANA598 presentations to be made at liver confab on April 15. To present at CanAccord Hepatitis C Conference on April 1, the day we post this Newsletter.
BioClinica (BIOC)(8/5/09). Acquires privately-held TranSenda, a provider of clinical trial management software.
Performance Technologies (PTIX)(7/20/09). Mobilicity selects company’s SEGway solution for its 3G wireless network. Launches IPnexus Element Management System for remote, IP monitoring and management of mission-critical systems.
Salary.com (SLRY)(7/5/09). CompAnalyst now reporting market data for more than 3900 jobs.
USA Technologies (USAT)(6/5/09). Launches ePort Wireless Test Kit for vending, unattended POS markets. Files to sell $12 million in securities, which is probably why the stock fell to current levels.
Ligand Pharmaceuticals (LGND)(2/20/09). Presents first-in-human Phase I data on lead SARM molecule LGD-4033.
The Orchard (ORCD)(11/20/08). Recent numbers show some revenue growth but big losses; balance sheet still seems to be okay. Several law firms launch probes “on behalf of the shareholders”.
Akeena Solar (AKNS)(10/20/08). To provide installation services through Lowe’s.
Identive Group (INVE)(10/5/08). Acquires RockWest Technology Group, a provider of ID management solutions. Introduces CHIPDRIVE MyKey, a computer lock and password manager on a smart card-secured USB stick.
U.S. Geothermal (HTM)(8/5/08). Closes $8.6 million private placement.
Bridgeline Digital (BLIN)(6/5/08). This was called Bridgeline Software with symbol BLSW.
Microvision (MVIS)(5/20/08). Completes design of new PicoP laser display engine for mobile embedded applications.
GlobalScape (GSB)(5/20/08). Year-end numbers show some revenue increase and net income; balance sheet still looks good.
Biolase Technology (BLTI)(4/5/08). Recent numbers not great; balance sheet could use more cash. Gets FDA okay on handheld dental laser.
ActivIdentity (ACTI)(3/5/08). Settles patent infringement case with Intercede.
Nanophase Technology (NANX)(1/20/08). Recent numbers not great and neither is balance sheet, but stock gets a nice pop. This is on the “Endangered List”.
Hollywood Media (HOLL)(1/5/08). Greatly pares losses year over year; balance sheet still looks good.
Linktone (LTON)(11/5/07). Acquires InnoForm Group Singapore. Yearly revenue and bottom lines drop; balance sheet still looks strong.
Sunesis Pharmaceutical (SNSS)(11/5/07). Recent balance sheet shows weakening. We are placing this on the “Endangered List”.
American Technology (ATCO)(10/5/07). Changes name to LRAD Corporation with new stock symbol LRAD.
XATA Corp (XATA)(9/20/07). Pritchett Trucking renews contract for MobileMax.
A.P.Pharma (APPA)(8/5/07). We are placing this back onto the “Endangered List” since the FDA did not okay nausea drug.
Radcom (RDCM)(7/20/07). Stock got a nice pop when a major Chinese 3G operator chose company to monitor their 3G data network.
TTI Team Telecom (TTIL)(3/5/07). Russia’s largest mobile operator, MTS Russia, deploys TTI service management solution.
YM BioSciences (YMI)(11/5/06). Announces early expansion of ongoing CYT387 Phase I/II clinical study.
8×8 (EGHT)(1/20/06). Awarded virtual telephone extension patent.
Our picks for this Newsletter are an investment outfit and another small biotech, both listed on NASDAQ.
CHINA DIRECT INDUSTRIES, INC. (NASDAQ: CDII) – $1.54. Twelve-month hi-low has been $2.67 – 95 cents. Located in Deerfield Beach, FL, with about 500 employees, this diversified investment outfit has 27.6 million shares outstanding, $44.9 million in total current assets, $77.7 million in total assets, little long-term debt, and $32.55 million in total liabilities. Institutional ownership is around 10%. One analyst rates the stock a “strong buy”. www.cdii.net
It’s been awhile since recommended any company tied to China for the plain reason that the country makes us a little nervous. Can their economy keep smoking for a few more years, or is the bubble about to burst? With China Direct Industries, Inc. we’re betting on the former scenario, but its diversity could cushion any downturn.
Trading on NASDAQ for almost sixteen years, China Direct manages a portfolio of Chinese entities and provides consulting services to Chinese companies. It operates in three business segments: Magnesium, Basic Materials, and Consulting. The magnesium segment produces and distributes various products such as magnesium ingots, magnesium powders, magnesium alloys, various grades of magnesium slabs, and magnesium scraps. The basic materials segment sells and distributes industrial grade synthetic chemicals consisting of glacial acetic acid and acetic acid derivatives, acrylic acid and acrylic ester, vinyl acetate-ethylene, and polyvinyl alcohol. The company sells and distributes steel and non-ferrous metals; owns zinc mining rights, and possesses production and distribution capability for zinc concentrate and lead.
Lastly, China Direct offers consulting services to U.S. and Chinese companies and these entail investment and strategic planning, financing structures and arrangements, mergers, acquisitions, and other transactions, such as managing and coordinating government approvals and licenses in the PRC, marketing, investor relations, and preparing required SEC filings. The company’s wholly-owned subsidiaries include CDI China, Inc., CDII Trading, Inc., China Direct Investments, Inc., and International Magnesium Group, Inc.
For FY2008, ending 12/31/08, revenue was $239.96 million with $11.39 million in net income. Since then, the company went through some structural and reporting changes and for the last quarter ending 12/31/09, revenue was $22.25 million with just under $900,000 in net losses.
Besides being a China play, this is also a global recovery play with the company believing that its margins can continue to improve on higher prices due to global growth.
Our 24-month target for the stock is $2.50 to $3.00.
For more information, contact CDII’s Richard Galterio at 877-China-57; richard.galterio@cdii.net
NOVAVAX, INC. (NASDAQ: NVAX) – $2.30. Twelve-month hi-low has been $7.79 – 52 cents. Based in Rockville, MD, with about 65 employees, this biotech has 93.5 million shares outstanding, $44.5 million in total current assets, $85.6 million in total assets, little debt, and $11.14 million in total liabilities. Institutional ownership is around 33%. Two analysts rate the stock a “strong buy”. www.novavax.com
Yep, another small biotech, but Novavax, Inc. uses a different approach in creating flu vaccines, and its balance sheet just may help the company get to where it hopes to go.
Founded in 1987 and public for nearly 15 years, Novavax is focused on creating differentiated, value-added vaccines that it feels improve upon preventive options for a range of infectious diseases. These vaccines leverage its virus-like particle (VLP) platform technology coupled with a disposable production technology. VLPs are genetically engineered three-dimensional nanostructures, which incorporate immunologically important lipids and recombinant proteins. Novamax’s VLPs resemble the virus but lack the genetic material to replicate the virus. Its production technology uses insect cells rather than chicken eggs or mammalian cells.
The company’s product targets include vaccines against the H5N1 and other subtypes of avian influenza, and Respiratory Syncytial Virus (RSV), as well as Varicella Zoster that causes shingles. Novavax has a joint venture with Cadila Pharmaceuticals to develop and commercialize seasonal influenza virus-like-particle-based vaccine candidates and therapeutic vaccine candidates against cancer, as well as adjuvants, biogenic products, and other diagnostic products for India. It also has a strategic collaboration with Xcellerex for the production of 2009 H1N1 vaccine.
Novavax is typical of many small biotechs inasmuch that it earns little money but chalks up hefty losses. During FY 2009, ending 12/31/09, revenue was $325,000 with $38.37 million in losses.
Admittedly, this is a story stock. The company has about a half-dozen irons in the fire for 2010, and any one of them could give the stock a lift.
Our 24-month target for the stock is $3.50 to $4.00.
For more information, contact NVAX’s Tricia Richardson at 240-268-2031; ir@novavax.com
Look for the April 20, 2010 Newsletter to be posted on 4/16 or 4/19
Thank you,
George